Pages

Tuesday, January 25, 2011

I Don't Want to Read Too Much Into This Gallup Poll, But...

It is highly suggestive of an excess money demand problem. This poll finds that concerns about a "lack of money/low wages" is the most important financial problem American face. This concern trumps healthcare costs and too much debt. Now, the respondents may be thinking more in terms of not having enough income rather than not having enough medium of exchange, but still given all the talk about balance sheet recessions it is interesting that this "lack of money/low wage" concern is more important than too much debt. Here is a summary figure of these concerns since March, 2009: (Click on figure to enlarge.)

Between the findings from this Gallup poll and the data shown in this post, you can forgive me for thinking that maybe, just maybe there still is an excess money demand problem.

It's very easy to confound variables here. Whether somebody thinks about "low wages" or "too much debt" is going to depend a lot on atmospheric conditions. Higher wages would make the debt less of a problem.

OTOH, health care costs are only a problem if you're sick now, or paying off medical bills - which could be too much debt.

However you slice it, those three things collectively are problems effecting 41% of respondents.

This could account for some of the high money demand. Money is one of those things you don't think much about, unless you have a lack.